Election Spending 2014: 9 Toss-Up Senate Races - ANALYSIS
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A N A LY S I S Election Spending 2014: 9 Toss-Up Senate Races By Ian Vandewalker Brennan Center for Justice at New York University School of Law
ABOUT THE BRENNAN CENTER FOR JUSTICE The Brennan Center for Justice at NYU School of Law is a nonpartisan law and policy institute that seeks to improve our systems of democracy and justice. We work to hold our political institutions and laws accountable to the twin American ideals of democracy and equal justice for all. The Center’s work ranges from voting rights to campaign finance reform, from racial justice in criminal law to Constitutional protection in the fight against terrorism. A singular institution — part think tank, part public interest law firm, part advocacy group, part communications hub — the Brennan Center seeks meaningful, measurable change in the systems by which our nation is governed. ABOUT THE BRENNAN CENTER’S DEMOCRACY PROGRAM The Brennan Center’s Democracy Program works to repair the broken systems of American democracy. We encourage broad citizen participation by promoting voting and campaign reform. We work to secure fair courts and to advance a First Amendment jurisprudence that puts the rights of citizens — not special interests — at the center of our democracy. We collaborate with grassroots groups, advocacy organizations, and government officials to eliminate the obstacles to an effective democracy. ABOUT THE BRENNAN CENTER’S PUBLICATIONS Red cover | Research reports offer in-depth empirical findings. Blue cover | Policy proposals offer innovative, concrete reform solutions. White cover | White papers offer a compelling analysis of a pressing legal or policy issue. © 2014. This paper is covered by the Creative Commons “Attribution-No Derivs-NonCommercial” license (see http://creativecommons. org). It may be reproduced in its entirety as long as the Brennan Center is credited, a link to the Center’s web page is provided, and no charge is imposed. The paper may not be reproduced in part or in altered form, or if a fee is charged, without the Center’s permission. Please let the Brennan Center know if you reprint.
Acknowledgements The Brennan Center gratefully acknowledges the Democracy Alliance Partners, Lisa and Douglas Goldman Fund, Joyce Foundation, The JPB Foundation, John D. and Catherine T. MacArthur Foundation, The Over- brook Foundation, Open Society Foundations, Rockefeller Brothers Fund, Jennifer and Jonathan Allan Soros Foundation, and the WhyNot Initiative for their generous support of our money in politics work. Research and Program Associate Eric Petry provided an enormous amount of essential assistance with analysis and research. This report would not have been possible without his efforts. Additional invaluable research was performed by Research and Program Associate Avram Billig, who also contributed a portion of the text. Elise Bromberg and Haley Shoaf assisted with research. Christopher Famighetti and Daniel I. Weiner offered valuable input to the data collection process. Useful edits were added by Jim Lyons. Naren Daniel and Lena Glaser con- tributed communications, design, and layout assistance. Lawrence Norden, Deputy Director of the Democracy Program, provided editing and indispensable guidance throughout the project. The author would also like to thank Michael Waldman for his guidance of the Money in Politics work. The statements made and views expressed in this report are the sole responsibility of the Brennan Center. Any errors are the responsibility of the author. About the Author Ian Vandewalker serves as counsel for the Brennan Center’s Democracy Program where he works on voting cam- paign finance reform. Prior to joining the Brennan Center, he served as a legal fellow at the Center for Reproductive Rights, where he litigated constitutional cases in state and federal courts across the country. Before that, Mr. Vande- walker served as the Rockefeller Brothers Fund Fellow in Nonprofit Law at the Vera Institute of Justice and clerked for the Honorable Frederic Block of the Eastern District of New York. Mr. Vandewalker earned his JD cum laude in 2008 from New York University School of Law, where he served as a senior articles editor for the NYU Review of Law and Social Change. During law school, he was an Arthur Garfield Hays Civil Liberties Fellow; his areas of focus for the fellowship were the First Amendment and reproductive rights. He holds an M.A. in philosophy from Indiana University and a B.A. from New College of Florida.
TABLE OF CONTENTS
Introduction 1
Methodology 2
I. Outside Spending Hits New Highs 4
A. Candidates Made Less than Half of Expenditures 6
B. More Spending in Store 7
II. Dark Money Dominates Nonparty Spending 8
III. Single-Candidate Groups Spend More and Disclose Less 10
A. Double-dipping Donors Can Evade Contribution Limits 12
B. Possible Cooperation with Campaigns 12
IV. Newly Competitive Kansas 14
V. Candidate Spotlight: Senate Minority Leader Mitch McConnell 15
VI. Spender Spotlight: Senate Majority PAC 17
VII. Unreported Spending: Dark Money that Cannot be Counted 18
VIII. Policy Recommendations 19
A. The Disclose Act of 2014 19
B. Internal Reveneu Service Rulemaking on Nonprofits’ Political Activities 20
C. Securities and Exchange Commission Rulemaking on Corporate Political Activity 20
D. The Empowering Citizens Act and Strengthened Coordination Rules 21
E. Public Campaign Financing 21
Endnotes 22INTRODUCTION
Most Americans know that this is an age of skyrocketing spending on elections. Less widely understood is
how the source of that spending has dramatically changed in recent years, and what that means for our
democracy. Outside spending — spending by those other than the candidates themselves — has increased
dramatically both in dollar terms and as a percentage of total election spending. Among outside spenders, the
portion coming from the political parties has diminished, as outside groups that are independent of both
candidates and parties — or at least claim to be so — increase in importance.
The key players in our political system, candidates and parties, are not necessarily accountable for outside
spending. And non-candidate expenditures are often lacking in transparency, leaving their effects on politics
mysterious. Increasingly, outside spending is a way for those who can afford it to evade the regulation of
elections — to try to influence elections without playing by the rules of our democracy.
We are now seeing the maturation of the system created by the Supreme Court’s deregulatory zeal in Citizens
United v. FEC. That decision allowed corporations and unions to spend their general treasury funds on
politics. While many feared the decision would result in for-profit corporations spending massive amounts
directly on elections, it is now clear that the largest impact was a proliferation of outside groups dedicated to
influencing elections (some of which may, in fact, be conduits for corporate money). Citizens United led to the
creation of super PACs and an explosion in the use of nonprofit organizations to influence elections. Super
PACs and nonprofits can accept unlimited contributions from individuals, corporations, and unions.
Nonprofits are not required to disclose the identities of their donors.
The reality of the post-Citizens United world bears little resemblance to the Supreme Court’s rose-colored
assumptions. The Court described a system where immediate disclosure would keep the public informed of
the potential influence of money. The reality is that most nonparty outside spending originates with hidden
sources. The Court assumed that outside spending could not corrupt candidates because it comes from
entities whose activity is independent of candidates’ campaigns. The reality is that outside groups, some
devoted to electing a single candidate, cooperate with candidates in many ways, potentially making their
unlimited contributions as valuable to candidates as the direct contributions that are subject to strict caps.
This report describes the realities created by Citizens United by examining the races where it is likely to have
the biggest impact in 2014: competitive races for the U.S. Senate. Money is pouring into these races because
the Republicans are widely seen as having a good chance to take the chamber from the Democrats, which
along with their solid majority in the U.S. House, would give them control of Congress.
Our main findings include:
Dark Money
• Dark-money groups that hide some or all of their donors accounted for $88.6 million, or 56 percent,
of nonparty outside spending.
o In the seven races for which we have data on both candidate and non-candidate spending,
dark money amounted to 24 percent of all spending.
o Our analysis does not include tens of millions of dollars spent on ads that are not required to
be reported to the FEC, all of which is dark money, meaning the true portion of outside
spending is higher.
• Outside spending in favor of Republicans is much more likely to be dark money, (80 percent of
nonparty outside expenditures), than pro-Democrat spending (32 percent of which comes from dark-
money groups).
ELECTION SPENDING 2014: 9 TOSS-UP SENATE RACES | 1Single-Candidate Groups
• Single-candidate outside groups are active in every state in our sample, and they accounted for
approximately half of nonparty spending in Alaska and Kentucky, as well as 30 percent in Georgia.
o There is more single-candidate group spending on the Republican side, at $20 million. Pro-
Democrat candidate-specific groups spent $8.3 million. There is reason to believe the
partisan difference is due to the fundraising success of Senate Majority PAC, a Democrat-
aligned group and the biggest non-candidate spender in our sample. Senate Majority has
apparently attracted donors who might otherwise have given to Democratic single-candidate
groups.
• Single-candidate groups that are also dark-money groups are a new phenomenon in this election. In
our sample, six of the eight highest-spending candidate-specific groups hide some or all of their
donors, including the top candidate-specific spender overall.
• Single-candidate groups depend heavily on money from double-dipping donors — individuals who
have given up to the legal limit in direct contributions to the favored candidate’s campaign. All but
one of these groups got the great majority of their individual donations from maxed-out campaign
donors.
o At least 76 donors gave money to single-candidate groups in addition to giving the
maximum amount to either the favored candidate’s primary or general campaign.
• Single-candidate groups also accept sizable contributions from corporations and unions, which are
completely prohibited from giving directly to candidates. Some groups got all their revenue from
these entities.
Methodology
We analyzed Senate contests in nine states, chosen because they were listed as “toss-ups” by the Cook
Political Report at the end of September: Alaska, Arkansas, Colorado, Georgia, Iowa, Kentucky, Louisiana,
Michigan, and North Carolina.1 We eliminated candidates who had attracted less than $300,000 in outside
spending. The analysis covers independent expenditures and electioneering communications reported to the
FEC through September 30. We used this cutoff to allow direct comparisons to candidate spending, since the
most recent candidate filings to the FEC cover the period through September 30. However, we were only
able to access FEC filings for twelve candidates; some of our data on candidate spending comes from
information released by campaigns and press reports. Even considering those sources, we were not able to
find spending data for all the candidates in two of our nine states. Thus, our comparisons between inside and
outside money consider only a subset of the sample that excludes Georgia and Michigan.
The deadline for candidates’ October quarterly filings is October 15. They are submitted on paper to the
Secretary of the Senate before being scanned and sent to the FEC, which hires a contractor to manually enter
the information into a database.2 Filings for U.S. House and presidential candidates, in contrast, are electronic
and immediately available on the FEC website. Despite perennially pending legislation to make Senate filings
electronic, Congress has yet to bring Senate transparency into this century.3 The expensive and inefficient
process delays the public’s access to vital information about Senate elections for weeks.
In North Carolina, outside groups have spent on electioneering communications, which are issue ads that
mention a candidate close to an election. We have counted these expenditures in our analysis, and we do not
differentiate between electioneering communications and independent expenditures, as those terms are
defined in federal election law.4 This report uses “outside spending” and similar terms to refer generally to
reported non-candidate spending.
We used analysis by the Center for Responsive Politics to categorize outside spenders’ disclosure. CRP
categorizes spenders as providing full disclosure, partial disclosure, or no disclosure. We consider groups in
2| BRENNAN CENTER FOR JUSTICEthe partial disclosure and no disclosure categories to be dark-money groups. We consider spenders to be
single-candidate groups if they have made expenditures favoring only one candidate or attacking that
candidate’s opponent during this election cycle. A few of the single-candidate groups have spent in support of
other candidates in past cycles.
After the election, we will issue an update to this report that analyzes the spending in competitive Senate
races including the crucial period leading up to Election Day.
ELECTION SPENDING 2014: 9 TOSS-UP SENATE RACES | 3I. OUTSIDE SPENDING HITS NEW HIGHS
The most expensive race in terms of overall spending — candidates and non-candidate spenders together —
so far has been North Carolina, at $64.8 million. Kentucky is close behind, with $58.2 million. Considering
only non-candidate expenditures from party and nonparty groups, North Carolina is again the standout;
outside spending was $39.3 million in the Tar Heel State.
Outside spending is on track to shatter previous records. The record for most outside money in any senate
race prior to this election was $52.4 million in Virginia in 2012.5 We expect as much as three-quarters of the
election’s spending to come after September 30, when our sample ends, as we observed in past research.6 If
the races in our sample repeat that pattern, all but Louisiana will match or exceed the previous record high.
North Carolina is on track to beat the record several times over.7
Outside groups have spent at a furious rate: Nonparty outside spending through September 30 amounts to
$158.6 million in these nine most competitive races. As a comparison, in the last midterms in 2010, nonparty
outside spending in all senate races reached only $97 million for 37 contests.8 As with all analyses of FEC
data, these totals do not include spending on ads that are not required to be reported to the FEC because
they do not explicitly call for a vote and are not aired close to an election.
The biggest outside spender in our sample is the Senate Majority PAC, which outspent both major party
committees. Senate Majority is what some have called a “shadow party,” an outside group dedicated to
winning seats for members of one party.9 In addition to its own spending, Senate Majority has virtually fully
funded Put Alaska First, a super PAC dedicated to reelecting Sen. Mark Begich (D-Alaska). If Senate
Majority’s more than $5 million in donations to Put Alaska First is added to its direct expenditures, the larger
group’s spending in these nine races amounts to $34 million.
4| BRENNAN CENTER FOR JUSTICETable 1: Top Outside Spenders — Nine Toss-Up Senate Races
Organization Expenditures Description
$29,083,280 Democratic-aligned super PAC
1. Senate Majority PAC
2. Democratic Senatorial $22,575,479 Democratic party committee
Campaign Committee
3. National Republican $13,019,216 Republican party committee
Senatorial Committee
$12,434,799 Conservative 501(c)(6) trade organization
4. U.S. Chamber of Commerce
$9,900,929 Conservative 501(c)(4) social welfare group
5. Crossroads GPS
6. NextGen Climate Action $9,483,407 Liberal super PAC
Committee
$7,661,433 Conservative super PAC
7. American Crossroads
McConnell (R) single-candidate 501(c)(4) social
8. Kentucky Opportunity $7,551,379
Coalition welfare group
$6,717,460 Democrat-aligned 501(c)(4) social welfare group
9. Patriot Majority USA
Begich (D) single-candidate super PAC (funded by
$6,660,083
10. Put Alaska First Senate Majority PAC)
Expenditures by the parties through September 30 totaled $35.7 million. Nonparty outside groups have spent
more than four times more than the parties so far in these nine elections. This is further evidence of the
decline in the relative spending power of the parties compared to outside groups. This decline can be seen in
longitudinal data from the Campaign Finance Institute concerning the whole Senate (data focused on the
most competitive races is not available for past elections).10 In 2008, the parties spent over six times more
than outside groups. Two years later in 2010, nonparty spending exceeded party expenditures for the first
time, by slightly less than 30 percent. In 2012, the first full cycle after Citizens United, nonparty spending shot
up to three times higher than party spending.
Democrats had a relatively small advantage in outside spending through the end of September. Pro-Democrat
outside spenders put up $101.3 million in expenditures across our sample, beating out those favoring
Republicans, which added up to $93 million. Pro-Republican outside spending led only in Georgia and
Kentucky, albeit with a huge margin in each race. However, looking only at expenditures earmarked for
general, rather than primary, elections, the Democrat advantage essentially disappears, indicating that
Democrats’ advantage was largely in the past.
None of the Democrats in our sample faced a competitive primary, yet primary expenditures by outside
groups favoring Democrats totaled $24.7 million, 82 percent of which was spent attacking Republicans. Pro-
Democrat groups spent the most on cross-party primary attacks in Alaska and North Carolina, where
incumbent Democrats got to wait out competitive Republican primaries, and in Louisiana, where the open
primary system forces candidates from opposing parties to face each other for the whole election cycle. On
the other side of the aisle, pro-Republican outside spending in the primaries came to $14.1 million, with only
17 percent attacking Democrats.
ELECTION SPENDING 2014: 9 TOSS-UP SENATE RACES | 5A. Candidates Made Less than Half of Expenditures
Because we were only able to collect complete candidate spending information for seven of the races in our
sample, this section considers a subset of our sample: Alaska, Arkansas, Colorado, Iowa, Kentucky,
Louisiana, and North Carolina.11 Across all seven races, candidate spending accounted for 49 percent of total
expenditures. Parties spent 9 percent, and the remaining 42 percent came from nonparty groups.
Figure
1:
Overall
Spending
by
Candidates,
Outside
Groups,
and
Party
CommiFigure
2:
Overall
Spending
in
2014
ElecFon
7
Toss
Up
Senate
Races
45
40
Democrat
Spending
Republican
Spending
35
30
Millions
(s)
25
20
15
10
5
0
AK
AR
CO
IA
KY
LA
NC
B. More Spending in Store
Spending increases dramatically as Election Day nears, meaning we still have not seen the full extent of the
money. More than half of total non-candidate spending for the cycle, when party expenditures are included,
was in September alone. Last month saw $101.8 million in outside spending — October’s total may be higher
still. In a 2012 analysis of competitive U.S. House races, the Brennan Center found that three-quarters of
outside expenditures were made after September 30, and one-half were made in just the last three weeks of
the campaign.12
Figure
3:
Total
Outside
Spending
by
Month
9
Toss-‐Up
Senate
Races
120
100
80
Millions
($)
60
40
20
0
Jan.
Feb.
Mar.
April.
May
June
July
Aug.
Sept.
ELECTION SPENDING 2014: 9 TOSS-UP SENATE RACES | 7II. DARK MONEY DOMINATES NONPARTY SPENDING
“Dark money” refers to spending by groups that hide the identities of some or all of their donors, and a
majority of nonparty outside spending in our sample of nine races — 56 percent — came from these
secretive groups. There was $88.6 million in dark money spent in these nine contests more than a month
before Election Day, already approaching the $97 million in dark money that was spent across all 33 Senate
elections in 2012.13 This cycle, dark money has increased both in terms of dollars and as a portion of total
election spending.14
Newsweek reported at the end of September that dark money expenditures are approximately 10 percent of
total candidate committee spending for House and Senate races this cycle.15 But in our sample’s subset of
seven competitive races for which we have candidate spending information, the portion is 23 percent. Dark
money, like outside spending generally, appears to be focused on the races that have the best chance of
changing the party in control of one of the chambers of Congress.16
Our totals don’t include tens of millions in unreported spending, all of it dark, meaning that the true portion
of dark money is undoubtedly higher than 56 percent.
Figure
4:
Nonparty
Outside
Spending
by
Source
9
Toss-‐Up
Senate
Races
PAC
(Full
Disclosure)
6%
Super
PAC
(ParFal
Disclosure)
23%
Super
PAC
(Full
Disclosure)
37%
Trade
Group
501(c)6
501(c)4
(No
Disclosure)
(No
Disclosure)
9%
24%
Total
Nonparty
Outside
Spending:
$158.6
Million
The most active dark money group (and fourth-biggest spender overall) in our sample is the U.S. Chamber of
Commerce, a nonprofit trade organization that does not disclose its donors. The Chamber, with $12.4 million
in expenditures in these nine contests, was outspent only by the two national party committees and the
Democrat-aligned Senate Majority PAC. Crossroads GPS, a social welfare nonprofit that also favors
Republicans, is close behind with $10 million in spending.17 And if Crossroads GPS is considered together
with its sister super PAC, American Crossroads, which only partially discloses its donors, the group would
surge ahead of the Chamber with $17.6 million in combined spending. In addition, as noted below,
Crossroads is one of the heavyweights of unreported spending, which adds untold millions to their
expenditures.
8| BRENNAN CENTER FOR JUSTICEDark money strongly favors Republicans. Overall, 80 percent of pro-Republican nonparty expenditures came
from dark money groups, compared to 32 percent of outside spending favoring Democrats.18 In addition,
unreported spending — where the leaders are conservative groups like Americans for Prosperity and
Crossroads — leans Republican, meaning the 80 percent figure underestimates the true extent of dark money
supporting GOP candidates.19
Figure
5:
Nonparty
Dark
Money
by
Race
9
Toss-‐Up
Senate
Races
20
18
16
Full
Disclosure
14
(Republican)
Millions
($)
12
Dark
Money
10
(Republican)
8
Full
Disclosure
(Democrat)
6
Dark
Money
4
(Democrat)
2
0
ELECTION SPENDING 2014: 9 TOSS-UP SENATE RACES | 9III. SINGLE CANDIDATE GROUPS SPEND MORE AND DISCLOSE LESS
Single-candidate groups, or “buddy groups,” are outside spenders that devote all of their resources to the
election of one candidate. When they take the form of a super PAC, candidate-specific groups can accept
unlimited donations from individuals and other entities. When they take the form of a nonprofit, they can
accept unlimited donations and hide the identities of their donors. Since campaigns are limited in the amount
they can accept from each individual, these groups allow donors to give more than $5,200 — the contribution
limit to federal candidates’ primary and general campaigns together — and know their money will be spent in
aid of the candidate’s election.
Single-candidate groups are active in all the states in our sample, although the amounts spent in Colorado,
Iowa, and Louisiana were small. Buddy groups spent approximately half of all nonparty outside expenditures
in both Alaska and Kentucky, and around 30 percent in Georgia.
Figure
6:
Alaska
Figure
7:
Kentucky
Single-‐Candidate
Spending
Single-‐Candidate
Spending
Democrat
Republican
Other
IEs
Republican
Other
IEs
Democrat
Other
IEs
20%
25%
Other
IEs
33%
25%
Democrat
Republican
Single-‐ Single-‐
Candidate
Candidate
43%
50%
Democrat
Republican
Single-‐
Single-‐ Candidate
Candidate
<
1%
4%
Total
Nonparty
Outside
Spending:
$17.1
Million
Total
Nonparty
Outside
Spending:
$22.3
Million
Some have labeled this category “buddy PACs,” but we use the term “buddy groups” because more and more
single-candidate organizations are nonprofits that hide their donors, rather than super PACs.20 Candidate-
specific groups that keep some or all of their donors hidden are active in seven of the nine contests in our
sample. Prior to this election, Senate races have not seen significant spending by single-candidate dark-money
groups.21 But in our sample, six of the eight highest-spending buddy groups hide some or all of their donors,
including the top candidate-specific spender overall, Kentucky Opportunity Coalition. The last column in
Table 2 displays the lack of transparency in the top-spending single-candidate groups.
Candidate-specific groups appear to be growing in significance. There are a few more single-candidate groups
focused on Senate candidates this year than there were in 2012.22 More importantly, these organizations are
on track to spend significantly more in this election. At the end of the 2012 elections, seven Senate buddy
groups had spent more than $1 million, and the biggest spender hit $5.9 million.23 In our sample of nine races
with more than a month left until the election, six groups have spent more than $1 million, and two have
already broken last election’s record high.
10| BRENNAN CENTER FOR JUSTICETable 2: Top Single-Candidate Groups — Nine Toss-Up Senate Races
Organization Expenditures Description Transparency
Pro-McConnell 501(c)(4)
1. Kentucky Opportunity $ 7,551,379 No disclosure
Coalition social welfare group
$ 6,660,083 Pro-Begich super PAC Full disclosure
2. Put Alaska First
3. Kentuckians for Strong $ 3,570,459 Pro-McConnell super PAC Full disclosure
Leadership
Pro-Tillis (North Carolina)
$ 3,179,626 No disclosure
4. Carolina Rising 501(c)(4) social welfare group
Pro-Perdue (Georgia) super
5. Citizens for a Working $ 2,152,656 Partial disclosure
America PAC
Pro-Cotton (Arkansas) super
6. Government Integrity Fund $ 1,047,880 Partial disclosure
Action Network PAC
Pro-Kingston (Georgia) super
$ 735,947.46 Partial disclosure
7. Southern Conservatives Fund PAC
$ 723,464.27 Pro-Begich super PAC No disclosure
8. Alaska Salmon PAC
9. Alaska’s Energy/ America’s $ 628,992.88 Pro-Sullivan super PAC Full disclosure
Values
Pro-Land (Michigan) super
$ 606,515.00 Full disclosure
10. B-PAC PAC
In the nine most competitive Senate races, Republicans have a distinct advantage in single-candidate group
spending. Twenty-five percent of pro-Republican nonparty spending, or $20 million, comes from buddy
groups, compared to 11 percent for groups that favor Democrats, or $8.3 million. Most of the Republican
spending is driven by $11.1 million from two groups focused on reelecting Senate Minority Leader Mitch
McConnell (R-Ky.).
There have been reports that single-candidate groups focused on Senate Democrats have not been able to
raise money because Senate Majority PAC has elbowed other groups out.24 Our sample lends support to the
notion. Of the nine Republican nominees, eight have candidate-specific groups spending on their behalf. Of
the nine Democratic nominees, on the other hand, only four are being helped out by active single-candidate
groups. Single-candidate groups have formed to support another four of the Democrats, but with little or no
fundraising and no spending.25
The buddy-group spending on the Democrats’ side is mostly driven by Put Alaska First, which is virtually
fully funded by Senate Majority. Removing Put Alaska First from the analysis would drive the candidate-
specific group spending down to just two percent of pro-Democrat nonparty outside spending, or only $1.6
million. Thus is it likely that there would be more single-candidate spending in our sample if it were not for
the fundraising prowess of Senate Majority.
ELECTION SPENDING 2014: 9 TOSS-UP SENATE RACES | 11A. Double-dipping Donors Can Evade Contribution Limits
Single-candidate outside groups can accept donations of unlimited size, allowing donors who have given up
to the candidate contribution limits to “double-dip” and provide further monetary support to a candidate’s
bid. The contribution limit for federal candidates is indexed to inflation and raised every two years. This cycle
it is $2,600 per election, and primary and general elections are considered separate elections, allowing
candidates to accept $5,200. But there is no limit on contributions to super PACs or political nonprofits. In
addition, corporations and unions are prohibited from contributing directly to candidates at all, but they are
allowed to give to outside groups.
We analyzed donors to the single-candidate super PACs in our sample to look for individuals who had given
up to the limit to the donee’s favored candidate. The most recent searchable FEC records for most races are
from the second quarter filings, except for two groups with somewhat later filings due to the timing of a
primary and runoff election. Therefore, any individuals who became double-dipping donors within the last
few months are not captured here. And of course, there may be more double-dippers among the contributors
to the single-candidate dark-money groups, who remain hidden from the public.
Seventy-six donors gave to buddy groups in this cycle while also giving up to the contribution limit for either
the favored candidate’s primary or general campaign; their donations totaled $3.4 million. Of those, 58 were
$5,200 donors who gave to both campaigns. These 58 people together gave single-candidate groups $2.7
million more than contribution limits allowed them to give to their favored candidate. The biggest-spending
double-dipper was Robert Mercer, who gave $350,000 to virtually fully fund American Heartland, a group
supporting Iowa Republican Joni Ernst.
The candidate-specific groups in our sample depend heavily on double-dipping donors for their revenue. We
calculated the portion of each group’s individual contributions from double-dippers, discounting money from
corporations and unions. Of the nine groups in our sample that took money from individuals at all, four took
in 99 percent or more of their individual contributions from double-dipping donors, and only one received
less than 70 percent from such donors.
Corporations and unions have also made sizable donations to single-candidate groups, despite the prohibition
on direct candidate contributions from those entities. Some buddy groups have taken no money at all from
individuals, such as Citizens for a Working America, funded by $2.1 million from two nonprofits and a
limited liability corporation; Michigan for All, funded by $1.3 million from unions; and Alaska SalmonPAC,
funded by $773,000 from environmentalist nonprofits.
The option of unlimited contributions raises concerns about the apparent corruption of candidates through
buddy groups. For example, controversy has arisen around contributions to a super PAC supporting North
Carolina Republican challenger Thom Tillis from three men whom Tillis, as speaker of the state House of
Representatives, supported for prestigious appointments to the University of North Carolina Board of
Governors.26 Tillis said in an email to legislators that one should be appointed because of his past political
contributions.27 Each of the men became double-dipping donors within months of being appointed to the
board. In fact, they all made five-figure contributions to the pro-Tillis super PAC on the same day.
B. Possible Cooperation with Campaigns
The more that single-candidate groups are able to collaborate with the candidates they support, the more
unlimited contributions to buddy groups function as unlimited contributions to candidates. Candidate-
specific groups can legally cooperate with campaigns in several ways: they can hire former aides to the
candidate, they can share vendors on key services like political strategy and messaging, they can have
candidates solicit funds for them, and they can use campaign materials in their own appeals to voters, among
other strategies.28
12| BRENNAN CENTER FOR JUSTICEA group called Put Alaska First that is supporting incumbent Democrat Mark Begich meets our criteria for a
single candidate super PAC because all of its spending has been in support of Begich or attacking
Republicans running for his seat. The group has accepted donations from a handful of Begich donors. But it
gets almost all of its money from Senate Majority PAC, a group dedicated to the Democratic Party holding
the Senate. Senate Majority has accepted donations from maxed-out Begich donors, although of course those
donors could not guarantee that their money would help Begich. Put Alaska First, like other single-candidate
groups, seems to test the notion that putatively independent groups do not coordinate with campaigns. The
Begich campaign uses some of the same vendors as Put Alaska First and Senate Majority.29
Kentucky Opportunity Coalition, the single-candidate dark-money group backing Mitch McConnell, spent
$1.8 million to air an ad that used footage produced by the campaign itself.30 As detailed in a new Brennan
Center report, After Citizens United: The Story in the States, it has become common for campaigns to post “B-
roll” footage on their websites of candidates doing the kinds of things typically seen in campaign
commercials, such as meeting with senior citizens or touring factories.31 This allows putatively independent
supporters to produce ads that portray the candidate just the way the campaign wishes.
Because the window of our sample closed at the end of September, it does not include more than $1 million
in spending in October by a single-candidate super PAC, Priorities for Iowa, which is supporting Joni Ernst
by attacking her opponent, Democrat Bruce Braley.32 The super PAC is run out of a consulting firm that also
employs David Kochel, who consults for Ernst’s campaign, although the group’s leader, Sara Craig said there
is a firewall in place to prevent illegal coordination. Craig and Kochel previously ran a nonprofit with a similar
name that also attacked Braley. The nonprofit was never required to report its donors, and the super PAC has
not yet disclosed its donors.
In fact, political operatives may still be creating single-candidate groups. New super PACs were formed in
October in five of the states with competitive Senate elections, and the Sunlight Foundation has reported that
the new groups have ties with the Republican leadership in the Senate.33
ELECTION SPENDING 2014: 9 TOSS-UP SENATE RACES | 13IV. NEWLY COMPETITIVE KANSAS
The Senate election in Kansas became competitive in September when the Democratic candidate successfully
withdrew his name from the ballot, setting up a head-to-head contest between the incumbent Sen. Pat
Roberts (R-Kan.) and independent Greg Orman.34 The race was listed as a “toss-up” by the Cook Political
Report around the same time. We excluded Kansas from our analysis because it has not been considered
competitive for as long as other contests, and outside spending in the race has only become significant after
the close of our sample on September 30. In order to gauge the effect of the race’s new significance in the
battle for control of the Senate, this section examines outside spending in the Kansas Senate race through
October 15.
Since the Kansas Supreme Court approved a ballot without the Democratic candidate on September 18,
outside money has poured into the state. Outside groups spent $4.3 million in the four weeks after that
decision; the entire race up until mid-September had only accumulated $1.2 million in non-candidate
spending.
Dark money’s influence in Kansas is in line with our sample: 59 percent of nonparty outside spending comes
from groups that hide donors. All of the dark money in the contest has favored the Republican, and the
largest dark-money spender is Freedom Partners Action Fund, a super PAC created this year by the Koch
brothers’ political spending network.35
On the other hand, all of the single-candidate group spending has favored Orman. The Committee to Elect
an Independent Senate is the only buddy group in the race and the only outside spender on Orman’s side so
far. It has spent about $389,000 in support of Orman since it was formed on October 6. The super PAC was
reportedly founded and at least partially funded by a friend of Orman’s, who has also given the maximum
contribution to Orman’s campaign.36 Due to the timing of filing deadlines, the Committee to Elect an
Independent Senate has not yet reported any donors to the FEC.
Figure
8:
Total
Outside
Spending
by
Week
Kansas
Senate
Race
3.0
2.5
Millions
($)
2.0
1.5
1.0
0.5
0.0
14| BRENNAN CENTER FOR JUSTICEV. CANDIDATE SPOTLIGHT: SENATE MINORITY LEADER MITCH MCCONNELL
Few have embraced the Supreme Court’s Citizens United decision more vociferously than long-time campaign
finance reform foe Senator Mitch McConnell.37 In a brief to the Supreme Court in 2012, he argued that critics
of the decision got it exactly wrong: Despite the warnings, unlimited spending from corporate treasuries had
not skyrocketed as a result of the decision, and it should stand.38 McConnell has also opposed a form of
campaign finance regulation blessed by Citizens United: disclosure. In 2010 and again in 2012, McConnell led
the successful opposition to legislation intended to bring greater transparency to political money.39
And Senator McConnell is easily one of the biggest beneficiaries of new campaign finance strategies that have
emerged since the deregulatory shock of Citizens United. As the top Republican in the Senate, McConnell is
one of the most powerful people in the nation, which makes him a focus of campaign fundraising and
spending, especially as he faces a tight reelection battle. And if the Republicans take the Senate, McConnell
will presumably become even more powerful as majority leader. McConnell has raised $28.6 million and seen
$15.5 million in outside spending on his behalf.40
The great majority of the outside spending favoring McConnell is from dark-money groups, just as with other
Republican candidates. With $10.7 million in dark money supporting him, McConnell is second only to Thom
Tillis in the amount of dark-money spending in his favor.
In terms of support from single-candidate groups, McConnell towers over the field, with 72 percent of
nonparty outside spending in his favor coming from buddy groups — more than $11 million. Only Mark
Begich, at $7.4 million, even comes close.
One of McConnell’s biggest supporters is a single-candidate super PAC called Kentuckians for Strong
Leadership. Kentuckians for Strong Leadership was founded by a senior adviser to McConnell’s 2008
campaign and was set up exclusively to support his reelection. 41 One of its three board members is
McConnell’s former chief of staff.42
Kentuckians for Strong Leadership has collected the most money from double-dipping donors of any group
in our sample. Sixty-eight percent of the individuals who have given to the super PAC have also maxed out to
McConnell’s primary or general election campaign.43 Slightly more than half maxed out to both campaigns.
While the group counts just 40 of these double-dipping donors, their contributions have had a serious impact,
adding up to about $2.25 million and comprising 74 percent of the group’s revenue from individual donors.
The average maxed-out donor contributed about $56,000 to the super PAC, more than 10 times what can be
given directly to McConnell. Not included in these figures are some super PAC donors who also gave $5,000
to McConnell before the contribution limit was raised in 2013. Although these donors have the option of
giving another $200 in this cycle, they maxed out at the time they contributed and before giving to the super
PAC in excess of current contribution limits.
One of the top double-dippers in McConnell’s corner, coal magnate Joe Craft, gave $200,000 to the super
PAC as well as $5,200 to the campaign. He and two other double-dippers also hosted a fundraiser for the
candidate that featured remarks from former Republican presidential nominee Mitt Romney.44
ELECTION SPENDING 2014: 9 TOSS-UP SENATE RACES | 15Figure
9:
Individual
Fundraising
Kentuckians
for
Strong
Leadership
Donors
Who
Maxed
Out
to
26%
Neither
McConnell
Campaign
Donors
Who
Maxed
Out
to
61%
13%
Either
McConnell's
Primary
or
General
ElecXon
Campaign
Donors
Who
Maxed
Out
to
Both
McConnell's
Primray
and
General
ElecXon
Campaign
Total
Individual
Fundraising:
$3.0
million
One other super PAC — the pro-Begich Put Alaska First — spent significantly more than Kentuckians for
Strong Leadership. It has only two double-dipping donors, having received almost all of its money from the
Democrat-aligned Senate Majority PAC. As noted, however, Senate Majority has donors who have maxed out
to Democratic Party committees, as well as to Begich.
McConnell’s campaign is also being buoyed by the biggest-spending single-candidate dark-money group in
the history of Senate elections: the Kentucky Opportunity Coalition. This social welfare nonprofit has hired
the same former McConnell campaign advisor as Kentuckians for Strong Leadership. 45 Kentucky
Opportunity Coalition spent $7.6 million through September 30 to help reelect McConnell, all on ads
attacking his opponent. Of course, there is no way of knowing whether the donors behind Kentucky
Opportunity Coalition have donated up to the contribution limit to McConnell, or what interests they
represent.
16| BRENNAN CENTER FOR JUSTICEVI. SPENDER SPOTLIGHT: SENATE MAJORITY PAC
Nonparty outside spending in our sample is more than four times higher than party spending adding to the
evidence that outside groups may be overtaking political parties in importance to campaign funding.
But a closer look at the spending reveals a more complicated story. The largest nonparty spenders are closely
aligned with the parties, raising the question whether their spending is best considered in the “party” or
“nonparty” column.46 On the GOP side, the largest outside spender is Crossroads, when the super PAC and
nonprofit are considered jointly. Crossroads has outspent the Republican Party’s official Senate committee,
the National Republican Senatorial Committee in our nine races. The group, co-founded by George W. Bush
aide Karl Rove, has long been known to have close ties to the Republican Party.47
By far the largest nonparty spender overall is Senate Majority PAC. Even if the group were not explicit about
its mission to maintain the Democratic majority in the Senate,48 its allegiance is obvious from its spending
behavior: Of the 10 races that the Democratic Party’s national Senate committee has targeted this election,
Senate Majority has also spent in all of them except Alaska, where it funneled millions through Put Alaska
First instead.49 Senate Majority is run by people with close ties to Senate Majority Leader Harry Reid (D.-
Nev.), including his former chief of staff of eight years, his former chief political strategist, and his former
communications director, as well as the former executive director of the Democratic Party’s official Senate
organization, the Democratic Senatorial Campaign Committee. 50 Reid himself has reportedly solicited
donations for Senate Majority PAC.51
By way of analogy to single-candidate groups, Senate Majority is a single-party group. It therefore presents the
opportunity for donors to give large amounts in excess of party contribution limits while still knowing that
the money will be spent to benefit the Democratic Party. And in fact Senate Majority has taken enormous
amounts from donors who also gave the maximum to the Democratic Senatorial Campaign Committee.
Some of these party double-dippers give in amounts that dwarf the six-figure contributions common among
single-candidate groups.
This cycle, individuals are limited to giving a national party committee $32,400 per year, or $64,800 in a two-
year cycle. One donor, media mogul Fred Eychaner, gave the maximum $64,800 to the Democratic Senatorial
Campaign Committee and is tied for the title of top donor to Senate Majority with donations totaling $5
million. Eychaner has also given up to the contribution limit to all nine Democratic nominees in our sample,
which as noted are almost all of the races where the DSCC and Senate Majority are spending their money in
the midterms. An incomplete review of only the biggest Senate Majority donors revealed several others who
maxed out to DSCC and gave six-figure donations to Senate Majority, often also maxing out to one or more
of the candidates that both committees are spending on.
ELECTION SPENDING 2014: 9 TOSS-UP SENATE RACES | 17VII. UNREPORTED SPENDING: DARK MONEY THAT CANNOT BE COUNTED
As noted above, FEC data does not include spending on sham issue ads, which attack or praise candidates
without explicitly calling for a vote. When these ads are aired within 60 days before a general election or 30
days before a primary election, the spending is required to be disclosed to the FEC as an “electioneering
communication.”52 But outside those time periods, the sham issue ads are unregulated.53 The groups that
have engaged in tens of millions of dollars’ worth of this unreported spending are doubly dark: They conceal
their donors and they do not report their spending.
Several groups do, however, describe their spending in press releases or statements to reporters. For example,
the social welfare nonprofit Americans for Prosperity has said it plans to spend $125 million on election
advocacy.54 There is no way to verify these amounts or to calculate an accurate total for unreported spending
in a given race or for the elections overall.55 The reports typically count only money spent on ad buys and
leave out other costs such as ad production, as well as spending that has nothing to do with ads, like voter
canvassing.56 We have reviewed press reports and spenders’ own statements to estimate levels of unreported
spending in some of the races in our sample.
In North Carolina, we found evidence of more than $23.5 million in unreported spending, a total that does
not include unspecified amounts spent on three reported ad buys. This estimate is nearly as much as the $25.5
million in candidate spending in the race. Our analysis of reported spending shows that 58 percent of
nonparty outside spending in North Carolina came from groups that hide some or all of their donors, but
adding our unreported spending estimate would bring the portion of dark money up to 76 percent.
Crossroads GPS, whose sister super PAC spent $1.9 million in North Carolina, has reportedly poured $10.1
million into ads attacking Sen. Kay Hagan (D-N.C.).57 Other conservative unreported spending came from
several groups in the network connected to billionaire industrialists Charles and David Koch: Americans for
Prosperity, the American Energy Alliance, Concerned Veterans for America, Freedom Partners, and the 60
Plus Association.58 Liberal groups have joined in as well, although they have been outspent seven to one in
this category by conservatives, according to our estimates. There was unreported spending by Patriot Majority
USA, a nonprofit affiliated with Senate Majority PAC, and the League of Conservation Voters, which also
made expenditures in the race that were reported to the FEC.59
All of these groups are either trade organizations or social welfare nonprofits, which are permitted to engage
in a certain amount of political activity. But the race has also seen a 501(c)(3) nonprofit group spend $1
million on ads praising Hagan during the primary.60 The tax laws forbid organizations registered under section
501(c)(3) from participating in politics at all.61 Nevertheless, the Southern Alliance for Clean Energy ran ads
touting Hagan’s environmental record and asking viewers to call and thank her. The ad is indistinguishable
from a campaign spot, and in fact it uses footage of the candidate created by Hagan’s campaign and also used
in a campaign ad.62 The group said that the ads were not political,63 but the Sunlight Foundation discovered
that some of the spots ran less than 30 days before the election, which required them to be reported to the
FEC as “electioneering communications.”64 The group then reported some of its pro-Hagan spending to the
FEC, and that spending is included in our analysis, although the unreported spending on the spots that ran
before the 30-day window is not.
Several of the organizations spending in North Carolina have been active in Arkansas, where we found
evidence of more than $8 million in unreported spending, more than half the amount of reported nonparty
outside spending. Adding the unreported spending estimate to our analysis would raise the percentage of dark
money from 62 percent to 75 percent. We also found reports of more than $6 million spent in Colorado and
more than $4 million spent in Alaska. In all of these states, the vast majority of unreported spending we
found was spent on ads attacking the Democrat or praising the Republican.
18| BRENNAN CENTER FOR JUSTICEVIII. POLICY RECOMMENDATIONS
The Supreme Court has ruled that outside spending poses no danger of corrupting our democracy, but the
realities of the world created by Citizens United have shown the Court’s profound mistake. Contributions to
putatively independent groups can buy donors levels of access that average voters and constituents will never
achieve. Documents from the Republican Governors Association revealed a price schedule telling corporate
donors how much to give in order to be granted meetings with elected officials.65 One political donor in an
interview explained that a donor would give to a shadow party like Senate Majority “to ‘get credit with’ the
party’s elected officials, who saw lists of donors after the election.”66
The lack of transparency in the majority of outside spending in competitive races leaves voters unable to
evaluate the political messages they see. In order to decide how much to trust a message, voters need to know
who the speaker is and what political agenda is being served. Moreover, dark money allows spenders who are
hidden from the public but not from the political networks and candidates they back to gain secret influence.
Voters who know that their elected representative is beholden to some special interest can vote her out, but
secret donations disrupt such democratic responsiveness. As Citizens United put it in approving of disclosure
as a constitutional way of regulating campaign spending, disclosure means that “citizens can see whether
elected officials are in the pocket of so-called moneyed interests. . . . This transparency enables the electorate
to make informed decisions and give proper weight to different speakers and messages.”67
Single-candidate and single-party outside groups threaten to make a mockery of contribution limits and their
prophylactic effect on corruption and influence buying. Outside groups’ ability to fundraise in unlimited
amounts makes them a tempting vehicle for evading the limits on direct contributions to candidates and
parties.68 Supposedly independent groups cooperate with the campaigns they support in many ways, walking
right up to the line of illegal coordination. Campaigns reach out to donors who have maxed out and suggest
they give to a friendly super PAC, or they share donors lists prior to publicly reporting the information.69 The
effect can be vividly observed in the donations to single-candidate super PACs, where most of the money
comes from donors who hit the contribution limit to the candidate.
Ultimately, the Supreme Court must change course and reverse its decisions interpreting the Constitution to
forbid common-sense regulations that give average people the opportunity to participate meaningfully in a
representative democracy. In the meantime, Congress and federal agencies can ameliorate some of the
troubling trends we observe. Citizens United allowed the creation of new legal mechanisms for big money to
influence elections and elected officials, but it did not mandate them. Although the judicial branch is
responsible for opening the door to secrecy and evasion of contribution limits through outside spending, the
legislative and executive branches are responsible for failing to close that door to the extent Court decisions
allow.
A. The DISCLOSE Act of 2014
Dark money as we know it would be eliminated by the DISCLOSE Act.70 The bill, a less-expansive version of
legislation that passed the House and came within one vote of breaking a Senate filibuster in 2010,71 would
require any entity that spends more than $10,000 on politics to disclose its donors. Under current law,
disclosure requirements hinge on the legal form that an organization takes. Political committees are required
to disclose all donors, but nonprofit groups organized under Section 501(c) of the tax code are not. Dark
money exists because secretive donors use these groups to hide their identities. The DISCLOSE Act would
eliminate that possibility by making disclosure triggered by a group’s actions, rather than its tax status.
Furthermore, the DISCLOSE Act addresses the practice of shunting money through an intermediary
organization to hide its source. As we have seen, some groups disclose their donors only to reveal that their
biggest donor is a dark-money group whose own donors are hidden. For example, the super PAC
ELECTION SPENDING 2014: 9 TOSS-UP SENATE RACES | 19You can also read
